The finances of shacking up without breaking up

By Onke Madikizela (@Mangutyan)

What unmarried couples should know and discuss about their finances before they commit to living together.

Illustration by Davide Bonazzi

With moving in together becoming increasingly popular in South Africa and mirroring the trend in the United States where nearly two thirds of couples in the choosing to delay marriage until they have lived with their potential spouse, the idea of cohabitating is not quite as taboo as it used to be.

I am part of the group that still find the idea of moving in with a boyfriend pre-marriage taboo, but I have noticed a change amongst a few friends and family towards taking time to live together before marriage.

This could be to cut down on living costs, the desire to get a sense of how marriage life will be, because the lovebirds simply can’t be apart or to augment the little quality time available to couples with busy schedules.

According to the Journal of Marriage and Family,  if you’re thinking of moving in with your man, go ahead! But, you may want to wait till you are closer to thirty and a little richer the paper advises.

The research has found that the risk of divorce for couples who decide to move in together before getting married has been overstated and that it does not necessarily lead to divorce, but that the age at which people decide to cohabitate is actually the most important characteristic.

The magic number has been pinned down to at least 23, but experts say that for every year a woman waits to get married, until her thirties, she reduces her chances of divorce. Although this may also reduce her chances of getting married, these marriages tend to be healthier.

“It turns out that cohabitation doesn’t cause divorce and probably never did,” says Arielle Kuperberg, assistant professor of sociology at the University of North Carolina in an article in TIME Magazine. “What leads to divorce is when people move in with someone – with or without a marriage license – before they have the maturity and experience to choose compatible partners and to conduct themselves in ways that can sustain a long-term relationship.”

One of the other main reasons for divorce among cohabiting couples is that poorer couples moved in together to save on living costs and then slid into marriage after getting pregnant. In comparison, wealthier couples were more inclined to wait.

So difficult finances and having a child without the intention to are what causes couples to break up and not the cohabitation, as often their finances do not improve.

First National Bank Head of Consumer Education, Eunice Sibiya says before starting talks about moving in together and how you will manage your finances, have an open discussion with your partner about each person’s financial position.

“Finances are not often a topic of discussion during a relationship when couples live separately which could result in the two parties not really having a thorough understanding of how each person manages their finances” says Sibiya.

Sibiya offers three other big tips for shacking up without breaking up:

1. Sit down and budget

List the accounts that each person has and the average minimum monthly repayments made on debt each month as well as savings. Also discuss needs and wants, and how money is spent monthly

“This will not only give you a good idea of how your partner manages [their] money but it could also point out areas in which you can save” says Sibiya.

2. Keep your debts separate

Each partner should manage her own debt and continue to pay the monthly installments individually.

“If larger items cannot be purchased with cash and one of the parties purchases the item on their credit card or account cards, make a repayment agreement,”

Writing up a cohabitation agreement before moving in will also serve as a legal document for how assets and debts should be split, should the couple split.

3. Open a joint account but split the bills

Sibiya advises couples to open a joint account into which each person contributes a set amount monthly. Both parties should have access to this account by sharing online banking details and also access for small items that one might need to make a run out for like milk and bread.

“As one would expect, a high level of trust is involved in such account and it is important to keep each other accountable when someone uses the mutual account to purchase personal items. If this has not been agreed upon, address the matter.”

When it comes to monthly bills like Wi-Fi, DSTV and levies, couples should list all the expenses with their monthly costs and allocate the expenses between each other as equally as possible.

Once the financial aspect is out of the way, the more important consideration, from what I’ve seen, will be the impact of the move-in on the relationship, so think wisely before you commit to this big step.


READ: BBC Capital: The good, the bad, the ugly: Finances of cohabitation

READ: Go Girl Finance: How Living Together Ruined My Finances

READ: Forbes: Financial Tips For Unmarried Couples





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